Dividend investing is a very common strategy for long-term investing. It is a great source of passive income for investors looking to set aside capital and allow it to grow, compound and be reinvested. Searching for high dividend-yielding companies that are robust and financially stable can be a difficult task. This is due to the fact that just because a company offers a high dividend yield doesn’t mean they are a stock worth the investment. It’s essential to pay close attention to the payout ratio for dividend stocks. This is the percentage of the income they distribute to investors as dividends.
These three dividend stocks below offer a high dividend yield that is also sustainable.
MidCap Financial Investment (MFIC)
MidCap Financial Investment (NASDAQ:MFIC), formerly known as Apollo Investment, is an assets manager that specializes in private equity, such as buyouts, acquisitions, and refinancing. MFIC also offers a number of secured and unsecured loans for business development purposes. Located in New York, New York, they have approximately 150 companies within their portfolio, including Turkey Hill, U.S. Auto, and Mannkind (NASDAQ:MKND). Their total portfolio value is more than $2 billion.
Currently, they offer an 11.20% forward dividend yield, which is paid out quarterly. The next payable date will be December 28 for $0.38 per share.
Year-to-date, MidCap has seen its share price grow by 17%. In early November, they released their earnings for the third quarter, which stated that net income rose by 16% and total revenue increased by 23% compared to the previous year. The CEO also mentioned in the press releases that following separate mergers of Apollo Tactical Fund (NYSE:AIF) and Apollo Senior Floating Ratio Fund (NYSE:AFT) will substantially grow their net assets.
MidCap Financial Investment is a strong private equity and business management company offering investors a decent return rate and a potential catalyst due to the recent merger announcement.
Altria Group (MO)
Altria Group (NYSE:MO) is a producer and distributor of tobacco products, including Marlboro brand cigarettes, Black and Mild cigars, and smokeless oral tobacco under the brands Copenhagen and Skoal. They also sell their products primarily through wholesalers such as retail chains.
Headquartered in Richmond, Virginia, they carry a strong forward dividend yield of 9.20%, which Altria has increased for the last 53 years. This very attractive does come with a downside: their share price has slowly been falling for the last several years. Over this last year, it has fallen by 10%, so they offer an incredible dividend, but it’s a stock that is very unlikely to experience much in the way of share price appreciation. Their dividend payment is distributed on a quarterly basis, and their third quarter dividend is for $0.98 per share.
Altria Group released its third-quarter earnings report in October, stating a revenue decline of 4% and a reduced full-year guidance partly due to a 12% decrease in overall cigarette sales.
Altria Group is a stable company that provides a reliable source of income, but investors should be aware that the company’s share price continues to fall. Investing purely for dividend yield may not bring much profit in the long term. You can see why this one easily earned its spot on out list of dividend stocks.
FS KKR Capital (FSK)
FS KKR Capital (NYSE:FSK) is another business development company in Philadelphia, Pennsylvania, that invests in debt securities. They have a portfolio of roughly 200 different companies, which primarily comprises companies within the software, healthcare, and insurance industries.
FS KKR Capital reported its third-quarter earnings on November 6, which stated that its total revenue increased by 13% and its net income rose by 8% compared to the year prior. Year-to-date, they have seen a 15% increase in their share price.
They offer a forward dividend yield of 12.86%, with the next dividend payout date being on January 3, 2024, for $0.64 per share.
FS KKR Capital is very similar to MidCap Financial Investment’s business structure. It is a financial company with decent returns and offers great dividends for investors seeking income from a stock building momentum. This is one of the top dividend stocks out there.
As of this writing, Noah Bolton did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
